A life of debt and poverty?

THE EROSION of real wages, growing bills, a grossly overpriced housing market and a financial crisis that led to five interest rate rises in 18 months. All these factors are blamed for a 20% rise in debt problems being tackled by Citizens Advice offices (CABs).

Citizens Advice, the biggest provider of free debt advice, says debt accounted for one in three of its inquiries - over 6,600 problems each working day. They say a worrying proportion have problems paying basic bills. Inquiries about bankruptcy rose by 50%.

Consumer debts and credit cards affected couples in their early 30s most. They had the most credit cards with large balances, many used to subsidise huge monthly mortgage payments. The mid-1990s housing boom started to push prices up, pushing up housing debts too, made worse by New Labour's block on the council house building that provided a cheaper alternative to buying. The rising cost of mortgage debt could herald the unwelcome return of mass home repossessions.

Many bank customers now find that a few missed overdraft payments can become a massive problem as escalating bank charges and fees (£5 billion last year) add to debts. So do bank schemes such as payment protection insurance that brings a 70% plus profit margin.

Secured loans that act as a second mortgage on homes were beginning to cause difficulties for homeowners who used them to consolidate debts from personal loans and credit cards. The CABs were beginning to see more queries from students and ex-students as student loans threaten to force another generation into debt.

These figures underline how right trade union activists are to fight for decent wages and how important it is to battle for a socialist future where capitalist banks and landlords no longer make for a life of indebtedness for consumers.